Question

"Unemployment is an economic as well as a social evil" Explain this statement...

Answer 1

The sentence implies that unemployment not only has economic effects but social too.Unemployment means less money in the hands of the people, leading to reduced spending and less amount paid in the formof taxes. In a way this means that Government receives less revenue for some investments.

Less money in hand also means that people start spending from their savings and thus spend it only for their bare necessities. Investments become totally null.

If there is large scale unemployment, oftencompanies introduce cut in prices. This in return affect the profit margins of the Company and this in return brings in more unemployment.

Unemployment also has serious social effects. The unemployed population often become depressed and lose the moral to work again. Thus is a loss of the human capital and can affect the future productivity of the nation as well.

When employment rate is high, production is also high and thus more GDP. However, high rate of unemployment means less GDP.